I’ve been talking for a while now about how network TV is likely to become a “farm team” of sorts for the streaming services. Many of the of shows produced for network prime time are likely to become the sorts of shows that fuel the FASTs, and at some point in the near future the networks will need to decide on the wisdom of maintaining a separate prime time line-up. 

These have all recently become a hot topic of media conversation, as what were once prognostications are now becoming reality: NBCU is rumored to be thinking of dropping the 10 p.m. hour from its primetime lineup, hit shows like Dancing With The Stars are being moved from linear (ABC) to streaming (Disney Plus), and shows like Abbott Elementary debut on linear (ABC again) but are quickly moved to streaming (Hulu this time) and are finding much bigger audiences in streaming.

And to top it all off, former Disney Chairman Bob Iger told the audience at the Code Conference that linear TV was “marching to a great precipice, and it will be pushed off.”

So there’s all that.

All well and good, but it brings us back to the core notion of whether the networks can actually make money or, more accurately, anywhere close to the same amount of money without their traditional prime time feeds.

It may be a moot point — traditional linear may be too far gone to save in the long term at this point — but it’s worth exploring.

Because if you are talking about the major networks moving their prime time linear broadcast feeds to their FAST services, you still need to figure out exactly how the are going to make money with this new arrangement, given that is comes with less ad time and, in many cases, a less desirable audience.

Higher CPMs From More Targeted Advertising?

While the usual response is that advertisers will pay more money to run ads on services that show fewer, better targeted ads, that’s always been a theoretical response rather than a real world one.

Yes, some advertisers will pay a bit more, and yes, the system will attract more brands, especially brands that had never run TV advertising, DTC brands that relied heavily on social video for example. But will there be enough new advertisers and enough of a CPM price bump to make up the difference? That is a key question and one that many people I’ve spoken with feel is unlikely.

Why? Well it’s not just ad revenue that needs to be made up. It’s the money from retrans fees and it’s likely that the hundreds of millions of dollars that will be lost once those fees evaporate will never come back. MVPDs were willing to pay the networks those princely retrans sums back in the day, when they needed the networks presence to ensure that viewers would sign up for cable service.

But in today’s streaming ecosystem, it’s more likely the MVPDs and OEMs who have the upper hand here.

The Benefits of the 25-Episode Season

There’s also the impact that streaming, with its 10-to-12-episode seasons, has on the creative community and on the syndication market in general.

Let’s start with the creative community.

A job on a 25-episode network series gave actors, writers, producers and crew members something close to a full-time job and having summers and holidays off worked nicely around school schedules. In the new streaming-centric world, creatives report feeling like they are always juggling jobs, and there’s a whole lot less certainty around schedules and where the next paycheck is coming from, even if that paycheck is likely to be an ample one. 

That, in turn, makes those careers less desirable for a new generation, which then ultimately had an impact on the quality of the work.

Then There’s Syndication

Ten seasons of Friends include 236 episodes, which is why that show is so popular in syndication: you can watch a new episode every night for months without seeing the same episode twice. That also helps it seem new to the next generation over viewers and those 236 episodes fill large blocks of time on a linear programmer’s schedule.

Streaming series, with four seasons of just 10 episodes each, become one-time binge watches, not long term comfort food. And a system built on linear channels needs those long running series in order to provide comfort food.

So the question is whether the networks will be incentivized to return to the 22 or 25 episode season for their prime-time-on-streaming lineups, or are the economics just too unfavorable in the current climate.

What Happens to All Those Affiliates?

Finally, there’s the question no one predicting the death of network prime time seems to want to answer: what happens to all those affiliates and O&Os without prime time?

Do they stick around and try to make things work using NextGen TV (ATSC 3.0) technology to create an alternative to streaming television? And if so, what type of audience will they serve, e.g. who out there is looking for an alternative to streaming?

(There is arguably a rural audience that is underserved by streaming, but the new infrastructure bill promises to do away with these sorts of broadband dead zones.)

Or do the affiliates find a home on streaming as purveyors of local oriented news and other content (and is there even a market for that?)

It’s perhaps the biggest question that will need to be answered if and when TV rolls out its own version of the farm team system and cuts back on broadcast.

And the industry still seems to be struggling to come up with an answer.

Stay tuned.

Comcast added 538,000 broadband customers in the fourth quarter, a record for that period for the cable giant and enough to outpace steep declines in its theme park and content units fueled by the pandemic. 

The 538,000 high-speed internet additions pushed Comcast’s total broadband additions for the year to 2 million, its best year on record. Video customers declined by 248,000 in the period, nearly twice the 149,000 lost in the same period in 2019. 

The broadband gains culminate what has been a record year for the segment, fueled by work-from home orders and home schooling driven by the pandemic. In Q3, Comcast added 633,000 broadband customers, its best growth quarter in that segment ever.  

ALSO READ: Peacock Signups Increase to 33 Million, Comcast Says

“Outstanding performance at Cable drove very strong fourth quarter results for our company,” Comcast chairman and CEO Brian Roberts said in a press release. “Our theme parks in Orlando and Osaka reached breakeven; and, encouragingly, Sky returned to customer growth in all three of its markets, bringing our total customer relationships and overall revenue in Europe essentially back to 2019 levels."   

But the broadband additions were enough to push revenue up by 6.3% in the quarter to $15.7 billion and cash flow up by 12.3% to $6.6 billion. For the year, cable revenue was up 3.4% to $60.1 billion and cash flow rose 8.6% to $25.3 billion.

Those gains helped offset continued losses at NBCUniversal’s theme parks — where revenue was down 62.9% in Q4 and fell 68.9% for the full year — broadcast television and filmed entertainment units.

Broadcast television revenue fell 12%, fueled by a 9.6% decline in advertising revenue. Retransmission consent and other fees were up by about 10% in the period.  

At its cable networks, revenue fell 6.4% to $2.7 billion in the quarter, due to lower licensing,  content and distribution fees. Ad revenue in the period was down 4.2%. But lower production expenses during COVID-19 helped boost cash flow in the segment up 22% to $1.3 billion.

ALSO READ: NBCU Plans to Shut Down NBCSN Cable Sports Net

At the theme parks, the pandemic decimated attendance, and mainly reflect operations in its Orlando, Florida and Osaka, Japan parks, which were opened on a limited basis during the year. 

U.K. satellite company Sky saw some gains, as total revenue was up 3.3% in the quarter (but down 3.3% for the full year), while cash flow sank 82.3% to $129 million. Total customer relationships were up by 244,000, more than three times the 77,000 additions in Q4 2019 which offered some encouragement. As more countries begin to roll out COVID-19 vaccines, Comcast was optimistic that its fortunes would improve.  

“With the vaccines rolling out throughout the world, we are optimistic that the parts of our business that had been most impacted will soon be back on a path towards growth,” Roberts said in the press release. “This confidence is shared by our board of directors, which has announced an increase in the dividend for the thirteenth consecutive year. In addition, it is now our expectation that we will be in a position to begin repurchasing shares again in the back half of this year. While this is certainly the most challenging period we have faced, I could not be more proud of how our management team and employees continue to pull together and deliver. Today’s results are a testament to their commitment and dedication.”  

Viewership increased across broadcast TV and ad-supported streaming during quarantine as consumers spent more time at home. But surprisingly, viewing time continued to hold steady as states reopened rather than dropping off. That means a higher level of content consumption is the new normal.

Marketers can successfully take advantage of this burgeoning trend by planning campaigns intelligently and deploying advanced technologies to attribute data. That way, demand will be higher when standard business volume resumes.

Riding the Wave

Industry studies found that even before the COVID-19 pandemic, consumers spent more time watching TV than interacting with any other ad-supported media platform. Lockdown enabled viewers to discover even more new content, and it was more than just Hamilton or Tiger King—for one thing, cable news ratings doubled.

This trend will not be slowing down anytime soon, so marketers need to make the most of it. Thanks to the prevalence of smart TVs and connected TVs (CTV), they can now learn more about consumers and reach prospective customers during new shows and dayparts, making primetime all the time.

As lockdowns ease, advertisers should employ smart strategies so they can ride this wave of upward trends in viewing.

Striking the Right Tone 

Just 7% of U.S. agency and marketing professionals retained regular ad spend for linear broadcast and cable TV spots during the pandemic. But the brands that emerge from this challenging time in the best shape will be the ones that let people know they care. The best way to achieve that goal is by planning properly and increasing share of voice when possible, so marketing becomes a natural part of recovery.

Another crucial step in this process is matching messages to the current environment. Brands need to strike a balance by generating demand for their products and services without alienating potential new audience bases. Some consumers are still skittish about going into stores, so ads should take a “wait and see” attitude into account.

Luckily, marketers do not need to limit their focus to brick-and-mortar retail since there are now plenty of alternatives. For example, e-commerce and delivery exploded because of widespread lockdowns, and eMarketer reports that American consumers will spend more than $700 billion shopping online in 2020.

Advertisers should use this change to their advantage and keep messaging as flexible as possible. Rather than pressuring customers to “buy now,” they can project care and stability through sensitive spots that emphasize recovery and employ advanced technologies.

Staying Connected

Enterprises across the country are reopening in a brave new world, so they need to tap into the most up-to-date marketing tools available. CTV is an essential part of that process, giving budget-conscious consumers the chance to access free, ad-supported channels without a cable subscription.

The viewing public has embraced this technology, and marketers are following suit. CTV ad spending will grow 25% this year, proving the pandemic has not deterred buyers and sellers from opening their wallets.

Firms can now combine television’s compelling brand storytelling with digital tools to engage cord-cutters and target the right audiences at the right time. Well-attributed analytics need to be at the center of any CTV strategy. As brands learn more about viewers, they should employ cost-effective, scalable strategies to turn them into customers.

CTV also maximizes opportunity because different departments can collaborate to evaluate campaign performance, improve results, and stop ad fraud. They should then attract new consumers through easily attributable automated spot buys. All parties will feel the downstream effects, reaping significant benefits as the economy recovers.

At times like these, it is difficult to know what tone to strike in spots or which tools enable brands to reach audiences most efficiently. But thanks to TV’s continued dominance, advertisers can still connect with viewers and grow their consumer bases. Marketers who take these strategies to heart will be ready for whatever comes next.

Josh Hare is senior VP at Viant, where he oversees revenue growth with fortune 500 brands and major agency holding companies. His primary focus is helping clients gain deeper insights into their customers’ online and offline paths to purchase, as well as strategically guiding them in how to make the best use of new emerging advertising technologies like advanced TV, Digital-Out-Of-Home and Digital Audio. Prior to joining Viant, Josh spent seven years at a broadcast network canvassing major advertising agencies and brands in the traditional and digital space.

The legal fight over the free streaming of TV-station signals over the internet is heating up as the networks and Locast prepare for their latest court battle and as previously quiet broadcasters have been making lots of noise — particularly after pay TV providers started recommending the online Locast platform as an alternative in retransmission disputes.

When Locast, a website that retransmits local broadcast TV signals, first launched in New York in January 2018, station owners were surprisingly reticent. That was not the case in 2012 when Barry Diller launched Aereo, a similar site that claimed simply to be using the web to provide access to subscribers' individual over-the-air antennas housed on its premises. Because of those individual antennas, Aereo argued, it did not have to negotiate carriage deals with TV stations. Broadcasters fought back immediately, won in court, and Aereo’s service went belly up.

Locast, too, did not ask for permission to retransmit New York stations or pay for carriage. As a nonprofit, Locast argued, it was using a copyright-law carveout also used by broadcasters to retransmit their primary signals to hard-to-reach locations.

Broadcasters were initially mum about Locast, possibly because some affiliates were OK with the extra online eyeballs. Networks were starting to strike online deals for their content that did not include local advertising; Locast’s streams included those ads.

But multichannel video programming distributors (MVPDs) began to point their customers toward Locast as a way to view TV stations that had blacked out their traditional services during retransmission disputes, reducing broadcasters’ leverage.

Charter Communications, for example, started talking up Locast during its retrans fight with Tribune Broadcasting stations. DirecTV owner AT&T also invested half a million dollars in the service to help make sure it continued to provide that online option.

According to one source familiar with Locast operations, it is approaching 1 million signups.

The Sports Fans Coalition, which launched Locast, has long argued that blackouts and escalating ticket prices and rights fees are consumer unfriendly and require some kind of redress that wasn’t forthcoming from either government or the private sector. That was part of the impetus behind Locast.

The networks were taking plenty of time getting their legal ducks in a row, since there is clearly a copyright carveout for nonprofits. But broadcasters did ultimately sue collectively in July of this year. They said Locast was “nothing like the local booster services contemplated by Congress” when it created the translator exemption.

The legal battle had begun in earnest. The network filing was followed by a Locast counterclaim alleging anti-competitive collusion, saying the broadcasters had gotten together to try and shut down the service or bury it in needless and costly litigation in order to “protect their market dominance in the retransmission-consent market.”

That was followed by the networks’ request that the court reject that claim, followed by a conference between the parties and the court on Nov. 1. Those legal balls remain in the air, with no resolution at press time on the network request to quash the counterclaim. “Just lawyers working on scheduling,” Locast founder David Goodfriend said.

Free, but Donations Sought

While Locast said its service is free, one user who reached out to Multichannel News disputes that. He said that after a grace period, streamers periodically lose the TV station signal they are watching and the service sends them to a home screen, asking for a donation. If they do not donate, they can still watch Locast by reloading the channel, having missed some of the program since it is all live. But the site does not make it clear that will be the case if they don't pony up.

Goodfriend conceded that after the grace period of uninterrupted viewing viewers are periodically asked (every 15 minutes, in fact) to donate, and have to reload the channel. But that doesn't mean it is not free, he said.

“The majority of Locast users are not donors,” Goodfriend said, “so the majority are getting something out of this that they like and enjoy and are not paying for it. If that isn’t free, I don’t know what is.” He pointed out that folks seem to have figured out the interruption issue and continue to tune in.

Even if Locast charged for the service, though, its lawyers are likely to argue that as long as that charge only covers expenses, it still qualifies as a nonprofit under the Copyright Law carveout.

In any event, the days of Locast flying under the radar are definitely over.

African-American consumers continue to lead the consumption of content across multiple platforms, according to a recent Nielsen 2019 Diverse Intelligence Series (DIS) report on African Americans.

Nielsen’s It’s In The Bag: Black Consumers’ Path to Purchase report states that African-Americans continue to be voracious consumers of television content, spending more than 50 hours watching live and time-shifted television a week in first quarter 2019, over 10 hours more than the total population, according to the research company.

“It doesn’t matter how many other streaming services we have access to, traditional television viewing is still number one with the African-American population,” said Cheryl Grace, senior vice president of U.S. strategic community alliances and consumer engagement for Nielsen. “What that looks like is 91% of every African-American can be reached weekly via television primarily through what we’re watching in real time and what we save on our recording devices.”

The tv shows African-Americans are watching don't always match that of the general population as black viewers gravitate more towards content that reflect their images and storylines -- particularly among younger viewers. Among adults 18-34, only Fox’s 911 and Empire show up among the top 20 most watched shows for both the African-Americans and the total population. VH1’s Love & Hip Hop franchise, Black Inc. Crew and Fox’s  cancelled Star are among the top 10 most-watched shows in young, African-American households that are not ranked on the top 20 most-watched TV show list for the total population.

Despite  heavy usage of traditional media, African-American consumers are on the cutting edge of new content distribution platforms and devices. Overall, 61% of African Americans are fascinated by new technology and 37% are more likely than the total population to be the first among their peers to try new technology products, according to Nielsen.

That includes a whopping 96% of all African-American adults having and using a smartphone, compared to 95% of the total population, according to Nielsen. Further, African-Americans 35 and older surpass all consumers in their age group by 2% for smartphone ownership.

Not surprisingly, African-Americans spend more time consuming video on their android phones and iPhones compared to the total population. Nielsen reports that Blacks spend nearly 30 hours a week on websites and apps on their smartphones, more than three hours more than the all consumers as a whole.

Youtube is the most consumed entertainment app for African-Americans at 79%, while Netflix has the highest market share among subscription video on demand apps with 39%, according to Nielsen. Hulu is second with 15%, followed closely by Amazon Prime Video at 14%.

On the social media front, Facebook is the top choice for African-American adults, with more than 65% of black adults using the service, according to Nielsen. Grace added that African-Americans overindex in the use of other social media services such as Instagram, SnapChat, Pinetrest and Twitter compared to the total population.

Yet despite African American consumers’ high consumption of traditional and new media -- as well as an estimated annual buying power of $1.3 trillion dollars -- Grace said companies are not increasing ad dollars targeting black consumers. She added that about $18 billion was spent on African-American-focused media in 2018, an overall decline of 5% from the prior year, with declines in such platforms as cable television (down 1%), digital media (-12%), network TV (-13%) and syndicated TV (-11%)

“Unfortunately despite how much we watch television and look at our digital devices, it doesn’t add up to the [ad] spend that we’re seeing,” she said. “We’re watching more, and yet [advertisers] are spending less to reach us. This is a problem.” 

Didja, the company behind a new OTT service that provides access to local broadcast networks, said it has landed a $12 million round of funding led by Vestech Partners as it aims to reach new markets, add features to its platforms, and broaden its business model.

Didja, which has raised $22 million so far,  has introduced its service/app with certain local broadcast TV networks in two markets -- Phoenix, Ariz. (branded as PhoenixBTV), and in the San Francisco Bay Area (marketed as BayAreaBTV).

In the Bay Area, for example, Didja offers OTT access to 35 broadcast channels, including TV Azteca (Spanish), Skylink and U Channel (Chinese), DiyaTV (South Asian), Viet Bay and Net V (Vietnamese), and KPOP (South Korean music videos), and hopes to eventually score distribution deals that will enable it to offer the local feeds of majors like ABC, CBS, NBC and Fox.

Early on, Didja is focusing on bilingual homes and offering its apps on a localized basis for free, and pitching an optional cloud DVR service for $4.99 per month for 1 terabyte of storage. Didja obtains rights to carry broadcast TV channels on its apps; it captures the over-the-air TV feeds from partner programmers at a local data center and prepares them for streaming on supported devices in the local region.

RELATED: Didja Takes Dozens of TV Stations Over-the-Top in the Bay Area 

The fresh funds will be used in part for expansion, including plans to enter Los Angeles in early 2018.

The new round will also be used to try out some new concepts and to bump marketing and try to expand channel counts in San Francisco, according to Jim Long, Didja’s CEO.

Some of that work involves a feature that drives viewers to download network apps and direct-to-consumer apps from other programmers and networks. Didja is starting to test that out with some stations in Phoenix.

Didja, Long added, also plans to experiment with some ideas that will enable its apps to support broadcasters in smaller markets.

Looking ahead, Didja is also noodling on a longer-term business model by which it would offer a package of local broadcast networks for about $15 per month – with about two-thirds of that going to the network partners.

Didja has generally focused on millennials and other younger audiences that tend to consume video on their mobile phones and to capture consumers who might be cord-cutters or have otherwise fallen out of the pay TV ecosystem.

Long believes Didja’s model will help local broadcasters broaden their viewership base and reach consumers they have trouble reaching today who, for example, are interested in watching  broadcast TV channels but aren’t keen to using an antenna.

He said Didja will also be pursuing a larger “growth round” that would aim to include participation from large corporations, media companies and other investors.

RELATED: Didja Loses Set of Digi-Nets for Local OTT TV Offering

Didja’s approach hasn’t been without hiccups. Last month, for instance, its apps dropped Katz Broadcasting digi-nets -- Bounce, Escape and Grit – with the hope that their absence would be temporary.

“We’re working through that,” Long said, believing that what it will take to restore those networks on Didja’s platforms is “nothing that we think is insurmountable.”

DirecTV Now, AT&T’s OTT TV service, said it has notched carriage deals with broadcasters that enable it to offer 100 live local channels across the U.S. in individual markets, more than tripling the number it offered when it launched last November.

DirecTV Now said it now offers local ABC, NBC and Fox stations in the seven largest DMAs -- Chicago, Dallas-Ft. Worth, Los Angeles, New York, Philadelphia, San Francisco and Washington D.C.

Still missing from the lineup is CBS, which also offers a stand-alone subscription service called CBS All Access.

DirecTV now said it now offers a lineup of more than 120 channels, plus a library of 25,000 VOD titles.

DirecTV Now added 152,000 subs in Q2, expanding its total to about 500,000.

WASHINGTON — The Federal Communications Commission will be able to close the broadcast-TV spectrum auction, and at an 84-Megahertz spectrum total some had suggested was the last clearing target for a successful process.

The second round of stage four of the forward portion of the FCC incentive auction ended Wednesday afternoon (Jan. 18) with bidders raising their ante to  $18,208,164,08, but more importantly $1.2570 per MHz POP.  The total could still go up, but it is now enough to close the auction once there is no more bidding.

Round one of the forward auction ended at noon Wednesday with bidders offering $17.7 billion ($17.2 billion net of bidding credits), which more than covers broadcasters’ asking price of $10 billion plus the $2 billion or so in auction and repacking costs. But it was still just under three cents short of the $1.25 per MHz POP in the top 40 markets (actually PEAs, or "partial economic areas") that would satisfy the second benchmark and allow the auction to close.

That per-POP price is essentially a minimum price the government will take for the spectrum in top markets in order to get what it considers a fair market price. So, the auction could only close when that fair top market price was met and the broadcaster-plus-costs total was exceeded.

The spectrum auction ain’t over ’til it’s over, but the final-stage rule has now been met, with forward auction bidders having bid enough to both cover the broadcasters' ask (the second component necessary to close the auction), and at a the $1.25 per MHz POP price in the top 40 markets that meets that second component of the so-called final stage rule.

The auction will continue until there is no more bidding in any market. But while the auction total will continue to climb, broadcasters' payout is capped at that $10 billion, with the balance after expenses going to deficit reduction, as the spectrum auction legislation specified.

Now that the final stage rule has been met, the FCC's spectrum reserves kick in, where up to 30 MHz has been reserved in each market for auction-eligible bidders--small businesses, women, minority-owned. The FCC set aside some spectrum so the larger players could not simply buy it all up.

Those reserve-elligible bidders can bid against each other for that spectrum, or choose to bid with against the big fish for the rest of the spectrum, but non-auction eligible bidders can't bid for the reserve spectrum.

RELATED: Broadband Bills Head to Senate Commerce Markup

After the auction closes, the next step will be for the FCC to hold a second mini-auction among the winning bidders for the exact frequencies they will be getting. They were bidding for generic 10-MHz blocks in the main part of the auction.

It remains to be seen how happy broadcasters are at a payout of some $60 billion less than their first ask. That means a lot fewer payouts, since broadcasters are only giving up 84 MHz of spectrum rather than the initial 126 MHz.

Winning bidders will still be getting a big payday, though, and reducing the number of TV stations forced to move off their spectrum should make the repack easier and reduce the likelihood of interference for broadcasters or wireless operators.

The auction began May 31.

“Today's auction results are a four-way positive result for broadcasters, the mobile industry, the government, and the American people," said Dan Hayes, PWC Strategy& principal. "Most importantly, they are the first steps towards freeing up additional spectrum for use in satisfying the public's seemingly insatiable desire for mobile connectivity.

"While the top-line results have been disappointing to some, $10B of proceeds are also expected to inject new life into some segments of the broadcast industry and support future opportunities for other stations to monetize their spectrum. The ultimate spread between the forward and reverse auctions will also provide a multi-billion dollar payday for the federal government, further enforcing its interest in auctions."

Preston Padden, former executive director of the Expanding Opportunities for Broadcasters Coalition, had said after broadcasters dropped their asking price to $10 billion that if there were a God, stage 4 would be the last. "There is a God and I am grateful to her!" he said after the final stage rule was met.

A new breed of TV distributors that’s wreaking havoc in the industry is now on its way to upending the retransmission-consent business model for both pay TV distributors and TV station groups.

Over-the-top subscription services such as Sony’s PlayStation Vue, Dish Network’s Sling TV and a planned offering from Hulu — known as virtual multichannel video programming distributors — aren’t just disrupting the way Americans consume content.

These new players are also forcing new business models on time-honored carriage negotiations between TV distributors that want to carry broadcast networks and those networks’ broadcast-station affiliates.

Virtual MVPDs are one of the hottest segments in distribution. As younger viewers continue to devote more time to watching content on mobile devices and online, they could become a force in the distribution sector, especially as the traditional pay TV universe declines.

Overall, pay TV subscriptions have dipped between 1.5% and 2% per year over the past two years. Although cable is expected to continue to improve its losses, ongoing subscriber losses at satellite TV and telco TV could push the annual declines higher in the future.

Those subscribers are going to have to go somewhere. And though many may cut the cord all together, opting for a broadband connection and a Netflix, Hulu Plus or Amazon Prime subscription, a good portion could go to vMVPDs.

That could create a sense of urgency for the station groups; 3 million vMVPD subscribers in 2017 could quickly escalate under the right market conditions, morphing into a serious source of revenue.

As vMVPDs are launched, they are hammering out new deals with broadcasters, but with a catch — the deals are on a national basis, unlike the market-by-market negotiations of the past.

Traditionally, broadcast networks took a laissez faire attitude toward retransmission consent. They negotiated deals with the distributors for only their owned-and-operated stations, leaving affiliate station groups to negotiate their own, separate deals.

But with vMVPDs, the strategy has been different. Networks have been striking their own, broad deals with OTT distributors, offering owned-and-operated stations in their local markets and next-day national network feeds in areas where they don’t own affiliate stations.

The idea is to bring the independent station groups on later, with those broadcasters receiving a percentage of the fee the network has negotiated. For example, if a network negotiated a fee of $3 per subscriber per month for its O&O stations and an additional $3 for its network feed, it would offer a percentage of that latter fee to station groups for its network affiliate stations. The share varies by market size, according to sources in the broadcast community.

For station groups, that could mean a substantially smaller piece of the pie. According to some cable executives, retrans fees for local stations from the likes of Sinclair Broadcast Group, Nexstar Broadcasting Group and Tribune Media could top $2 per subscriber per month. And some are holding out for more, to the chagrin of some broadcasters, who warn that if the station groups overplay their hands, they could end up with nothing.

From the station perspective, accepting the lower fee could mean they would have to squeeze even more money out of their existing retransmission- consent base — the cable, satellite and telco TV operators who are already complaining they are paying too much.

Revenue from retransmission consent, a product of the 1992 Cable Act, has been the savior of some broadcasters, taking up the slack during a depressed advertising market and in some cases representing more than 30% of a station’s total revenue.

At the same time, it has been the bane of cable, satellite and telco TV operators who have complained they are paying increasingly higher fees for content that is available over the air for free.

Regardless of the partisan claims, retransmission consent is a large part of the TV business, expected to top $7.7 billion in 2016 and growing to $11.6 billion in 2022, according to research firm SNL Kagan.

According to Kagan, more than half of that revenue is from local broadcast groups like Sinclair and Nexstar, which made up about $4.6 billion of the $7.7 billion generated in 2016. In contrast, owned and operated network stations accounted for about $2.9 billion of the estimated 2016 retrans haul.

Virtual MVPDs are new to the TV scene — Sling TV, the oldest, launched in 2015 — and still have relatively few subscribers. Sling TV leads the pack with about 900,000 customers, and the segment as a whole is expected to have between 2.5 million and 3 million subscribers by the end of 2017, according to Morgan Stanley media analyst Ben Swinburne.

Of the major vMVPDs, so far only Sony PlayStation Vue has a deal with local station groups, specifically Sinclair and Raycom Media for certain CBS affiliates. The other major vMVPDs — Sling TV, DirecTV Now and Hulu — have deals with national broadcast networks, but no station groups yet.

Not all of the national broadcasters have signed on, either. Hulu, which plans to launch its vMVPD service later this year, signed a carriage deal with CBS earlier this month, and has agreements with ABC and Fox, but not with NBC. NBC, a partner in the Hulu consortium, is expected to sign on at some point.

CBS, which has its own OTT service CBS All Access, a tough negotiator in vMVPD deals, still hasn’t reached a pact with the largest vMVPD, Sling TV.

NICHE NETS AT ISSUE

Adding to the confusion, some station groups want carriage of niche cable networks — such as Sinclair’s Tennis Channel and Tribune’s WGN America — to be included in their deals. That’s caused some bumps in more traditional negotiations: Tribune’s stations went dark to Dish Network subscribers last year, in part because Tribune insisted on including carriage of WGN America in the negotiations.

While the parties eventually worked out a deal that included carriage of the stations and the cable channel, the networks were dark to Dish’s 13.6 million customers for nearly three months between June 13 and Sept. 3. Other spats are expected as Sinclair, one of the more aggressive broadcasters on the retrans front, begins to bundle Tennis Channel, purchased in March of 2016, into future negotiations.

According to sources familiar with their thinking, broadcasters believe including the cable networks adds unnecessary friction to vMVPD negotiations. They prefer the deals to remain pure broadcast plays.

All this makes for a sticky situation for station groups, which rely on the networks for primetime content but have seen their revenue dwindle as the advertising market has declined and networks — through reverse compensation — are taking a large chunk of their retrans fees.

At least publicly, the stations have said they are trying to work out deals with new distributors as they come up.

At Tribune, that includes carriage on devices like Roku, Amazon Fire TV, Apple TV and Google’s Android TV. Three of its stations — The CW affiliate WPIX in New York and Fox affiliates KTSU in Salt Lake City and WGHP in Greensboro, N.C. — launched on those services in December. Tribune’s remaining 39 stations are expected to roll out in 2017.

“Our strategy is to get our live linear content carried on new distribution platforms in an economically sensible and sustainable way,” Tribune Media senior vice president of corporate relations Gary Weitman said in a statement. “We’re deep in discussions with all the major players and we are confident that we will make good progress on this front in 2017 … As everyone knows, solving the Rubik’s Cube of OTT requires coordination and negotiation with both OTT providers and our network partners. It’s a complicated situation, but we believe that the interests of consumers in having more ways to access the content they want will ultimately win out and that economic benefits will flow to all the parties involved.”

Sinclair and Nexstar representatives did not respond to requests for comment.

BTIG media analyst Rich Greenfield wrote in a note to clients that as more viewers leave linear TV for cheaper vMVPD services, they don’t miss local broadcast channels. If they did, a digital antenna would solve that dilemma.

But the analyst sees a fundamental change in the way vMVPD deals are being negotiated.

“We believe broadcast networks are creating a framework to bring affiliates into each vMVPD on terms set by the network, with the affiliates unable to negotiate directly with the vMVPD themselves,” Greenfield wrote in a recent note to clients. “Essentially, take it or leave it affiliate deals structured by the broadcast network” will “significantly reduce the net payments offered to affiliates.”

The broadcasters see the situation as a natural evolution. According to sources familiar with their thinking, most believe that the current structure is similar to deals struck for video-on-demand and TV Everywhere content. Local affiliates were kept out of those deals to ensure that the scope of programming was consistent.

The absence of station groups from many virtual MVPD deals is largely a matter of convenience, Pivotal Research Group CEO and senior media & communications analyst Jeff Wlodarczak said.

‘LIKE HERDING CATS’

“It’s like herding cats to get these local affiliates to agree to deals — very complex and time-consuming,” Wlodarczak said. “It is easier to sign a broad deal and to throw in the O&Os.”

The issue, Wlodarczak said, is that the cable operators will likely pass through most of these costs. “Given that the expense of pay TV is the No. 1 reason people leave, it will exacerbate the media players pay TV subscriber issues. Betting on a slightly cheaper skinny bundle is not going to solve that issue, and it will not be good for less popular networks.”

As far as increased retrans fees for pay TV, Wlodarczak said that anything can happen, but to “expect more fireworks.”

That may be an understatement, given how the last big battle between networks and affiliates was resolved. Affiliates first resisted when networks demanded back in the early 2000s that they turn over up to half of their retrans haul to them in the form of reverse compensation. That was resolved simply by the affiliates stepping up their retrans fees.

Traditional MVPDs have grown used to rising retrans costs and fickle stations who raise the ante for carriage on a whim, but the breaking point could be looming near, especially as skinny bundles and virtual MVPDs proliferate.

“They’re pushing the envelope,” said one cable executive who asked not to be named. “They’re trying to get to a certain number that is not sustainable. And kids don’t care as much about local news.”

Dish Network and corporate cousin EchoStar appear to be nearing the retail launch of Sling AirTV, a product that integrates over-the-air broadcast TV with Sling TV’s OTT service.

That product, which uses the Slingbox M1/M2 form factor, will cost $149.99 and launch sometime next month, according to ZatzNotFunny, which located a “draft” listing on Amazon that sheds more details on the product.

ZatzNotFunny first spotted details about AirTV last April. Sling TV and Dish have been asked to comment on rollout plans for AirTV.

Update: Dish declined to comment. 

Per that listing, the device is “coming soon” and allows users to stream live local programming, is compatible with antennas from suppliers such as Mohu, and “requires” the Sling TV app. Here’s more detail on how the draft listing describes AirTV:

“With AirTV and an HD antenna, you can stream live local programming, news and your local sports anywhere in your home using the free Sling TV app and its integrated program guide. No paid contracts-just free local TV on any compatible device. And if you want more channels, you can subscribe to paid Sling TV packages-all from the same app.”

Dave Zatz noted on the blog that Dish and EchoStar had been targeting a late spring 2016 launch, but now believes Air TV is “on track for a revised September release running $150.”

Even without AirTV, Sling TV has been making progress in other ways when it comes to supplying local TV programming.

In January, Sling TV launched an app on Channel Master’s DVR+ platform, a subscription-free DVR that integrates broadband connectivity (for OTT services) and over-the-air TV tuning capabilities.

Sling TV’s new multi-stream “Blue” tier, which runs $25 per month, offers local Fox and NBC feeds in select markets, and has been offering local ABC feeds in Chicago, Fresno-Visalia, Houston, Los Angeles, New York, Philadelphia, Raleigh-Durham, and San Francisco via a Broadcast Extra add-on package that costs an additional $5 per month.

A study on so-called peak TV and streaming reveals just how elevated a perch television is enjoying in pop culture.

Fully 72% of respondents  to a survey by Miner & Co. said they choose TV shows over movies these days, while 67% said they are streaming their favorite TV shows at the expense of reading. Furthermore, 85% said they have a summer streaming list, while 76% have a summer reading list.

Miner & Co. Studios surveyed 801 TV viewers between the ages of 18 and 59.

"For the past few years, streaming has tended to drown out conversations about broadcast and cable, and it continues to gain strength as a preferred platform for viewing,” said Robert Minor, president, Miner & Co. Studios. “But the investment in quality scripted across the board has, at least for now, captured viewers’ attention across all options – broadcast, cable and streaming. The choice, convenience and control of streaming will continue to hold very high appeal but content is key – especially in attracting and retaining viewers.”

Not surprisingly, streaming and cable scored the highest for delivering great television; perhaps more surprising is that broadcast, which goes largely ignored at the awards events, was a very close runner up. Some 87% of respondents said streaming services, such as Netflix and Amazon, are “very” or “somewhat” reliable sources for great television. Cable too had 87%, though the subset of premium cable scored 83%. Broadcast networks came in at 86%.

Among respondents, 77% said there’s no such thing as too much good TV.

Read more at broadcastingcable.com.

In a clear sign that its talks with broadcast TV station groups outside the O&Os are progressing, Sony PlayStation Vue confirmed that it has extended access to live local CBS feeds in nine more markets.

Per a PS Vue official, the following markets and stations are now part of the virtual MVPD’s live  TV lineup:

-Austin: KEYE (Sinclair)

-Charlotte: WBTV (Raycom Media)

-Cincinnati: WKRC (Sinclair)

-Cleveland: CBS9 (Raycom)

-Grand Rapids: Newschannel3 (Sinclair)

-Harrisburg: CBS21 (Sinclair)

-Salt Lake City: KUTV2 (Sinclair)

-San Diego: CBS8 (Midwest Television)

-West Palm Beach: CBS12 (Sinclair)

Cord Cutters News reported Wednesday that PS Vue had recently added CBS live streams in some new markets.

The extensions of CBS live local feeds in select Raycom, Sinclair and Midwest Television markets comes about two months after PlayStation Vue confirmed that it was offering the live local feeds of the Big 4 (ABC, CBS, NBC and Fox) in all of their respective owned and operated markets.

“We continue to have discussions with local broadcast station owners and will be working to add more local stations to TV markets across the country,” a Sony spokesperson said via email.

Sling TV, a virtual MVPD owned by Dish Network that offers a mix of skinny bundles, has also been making progress in its ability to offer live local broadcast TV channels on its OTT-TV platform.

In markets where it doesn’t offer certain live local broadcast TV feeds, PS Vue’s new national “Slim” packages, launched in mid-March, provide next-day, on-demand access to shows from those broadcasters.

PS Vue also introduced a new app for the Amazon Fire TV Tuesday that features a faster navigation menu along with an update specifically for second-generation Fire TV boxes that support 60 frames per second and deliver a richer HD picture.

PS Vue is also offered on PlayStation 3 and PS4 consoles, Roku players and Roku TVs, the Fire TV Stick, via apps for Android and iOS mobile devices, and is optimized for the Google Chromecast streaming adapter.

Sony has not released sub figures for PS Vue, which debuted on March 18, 2015,  but Bloomberg reportedrecentlythat the servicehad eclipsed 100,000 subs,

WideOrbit, a supplier of ad management software, and digital branding software specialist TubeMogul said they have combined to create a programmatic platform that will enable brands and agencies to buy broadcast TV and digital video advertising.

They said the joint offering matches advertiser demand from TubeMogul’s platform with broadcaster and network inventory from WideOrbit’s WO Programmatic-TV online marketplace.  WideOrbit noted that audiences from major broadcasters such as The E.W. Scripps Company and Raycom Media are available for purchase at WO Programmatic-TV’s launch point.

Under the deal, WideOrbit will be TubeMogul’s exclusive source of local broadcast advertising inventory. TubeMogul, meanwhile, will be the exclusive programmatic platform permitted to purchase inventory through WideOrbit’s ad exchange through March 31, 2015.

They claim the combination will speed up and simplify the TV advertising buying and selling process.

“TV ads have been purchased with the same slow manual processes since the Mad Men era. Today’s announcement represents a tipping point in the history of television, the moment when advertisers can buy across every screen with software,” said Brett Wilson, co-founder and CEO of TubeMogul, in a statement.

“There are many ways buyers want to buy programmatically, but TubeMogul stood out as the perfect partner because of its strict focus on the buy-side and dedication to the medium of video,” added Eric R. Mathewson, founder and CEO of WideOrbit. “WideOrbit remains a sell-side programmatic solution representing the needs of broadcasters and networks. TubeMogul’s 100% commitment to the demand-side perfectly corresponds with the needs of our sell-side clients.”

Dirty Dancing was the surprise hit in the movie theaters, while songs from U2’s The Joshua Tree dominated the FM airwaves across the Southland.

The year was 1987 — which marked the last time Telemundo’s Los Angeles O&O, KVEA, defeated its longtime rival, Univision O&O KMEX, with its 11 p.m. newscast.

Until now.

In a historic feat, KVEA’s Noticiero Telemundo 52 was the most-watched local program in the all-important adults 18-49 demographic in the month of September, according to Nielsen. The 30-minute program averaged a 1.4 rating (or 107,000 impressions) in the demo, and averaged a 36% audience share among all other Spanish-language stations in the Los Angeles DMA in the time frame.

That puts KVEA ahead of not only KMEX, but four other Spanish-language TV stations. More notably, KVEA is now attracting more viewers aged 18-49 than the local newscasts of the Big Three’s O&Os  — KABC-TV, KCBS-TV and NBCUniversal sister station KNBC. It’s also beating out programming on Fox O&O KTTV and MyNetwork affiliate KCOP; Tribune Co.-owned The CW affiliate KTLA; and CBS’s news-intensive independent KCAL. 

“Securing the No. 1 spot in our market for this key demographic at 11 p.m., and — regardless of language — for the first time in 27 years, confirms that we are delivering our viewers the local news and information they want,” Celia Chavez, president and general manager of KVEA, said in a statement. “We have a dynamic news team that works passionately to provide our viewers with the information they need, and we will continue to deliver live, local breaking news and aggressive weather coverage for the communities we serve.”

KVEA’s 11 p.m. local newscast is anchored by Ana Patricia Candiani, a veteran reporter who returned to Telemundo in 2011 after an eight-year stint anchoring the network’s national primetime newscast — she stepped away in 2008 — as well as several other Telemundo news programs. Her experience includes roles as a morning news anchor for former Spanish news/talk radio network Radio Unica, as a news anchor for the now-defunct Spanish-language network CBS Telenoticias and as a programming supervisor for 20 radio stations in Mexico owned by Grupo Acir.

Candiani’s co-anchor at 11 p.m. is Edgar Muñoz, who joined KVEA in March after serving as a Mexico-based correspondent for Univision. He anchored Hechos, the primetime local newscast for KAZA, the Azteca América flagship station in Los Angeles, from 2003 to 2005.

KVEA’s ratings triumph is the culmination of a series of enhancements in 2013 and 2014 that included a new studio, a new graphics package and increased investigative reporting on a wide range of news stories. The station also moved its weekend newscast to 5:30 p.m. from 6 p.m., part of a network-wide scheduling mandate.

While Nielsen data is not available for KVEA’s weekend newscasts, indications are they’ve been successful: As of Nov. 3, the 5:30pm newscast will now air seven days a week, the network confirms. It’s part of a rollout of 30-minute local newscasts airing at 5:30pm ET/PT and 4:30pm CT/MT at  Telemundo stations in Chicago, Dallas, Denver, Houston, Las Vegas, Miami, New York, Philadelphia, Phoenix, the Rio Grande Valley, San Antonio, San Francisco and Tucson. Thirty additional staffers were added across 14 stations to boost the telecasts.

“This announcement marks a new era for the Telemundo Station Group and Spanish-language news,” Manuel Martinez, president of Telemundo Station Group, said. “All of our stations have a commitment to deliver the best local breaking news and weather to our viewers and this expansion will help us deliver the type of news coverage our viewers demand and deserve.”

As reported in the August edition of Hispanic Television Update, Telemundo has perhaps been the most aggressive player in news this year. Among the many changes: O&O KSTS in San Francisco now provides the only locally focused Spanish-language newscast airing before noon. In July, Telemundo announced that Las Vegas station KBLR would produce its 6 p.m. and 11 p.m. newscasts live and locally. In late August, respected author and journalist Mirta Ojito returned from New York to Miami for the newly created role of director of news standards.

In its most recent moves, Telemundo O&O WSNS in Chicago has paired longtime Univision reporter Anabel Monge with current anchor Alfonso Gutierrez for its weekday 5 p.m. and 10 p.m. newscasts. Monge was previously an anchor and general assignment reporter at KWEX in San Antonio, and has worked at Univision stations in Sacramento and Fresno.

Media General, Inc. and LIN Media shareholders gave the thumbs up to their pending $1.6 billion merger in separately held meetings Monday.

Media General and LIN announced their deal in March. After certain divestitures, the combined company will own or operate 71 TV stations in 48 markets across the country, reaching 27.6 million or 24% of U.S. television households. The deal still needs approval from the Federal Communications Commission.

After the closing, expected early next year, the combined company will keep the Media General name and will be led by LIN Media CEO Vincent Sandusky. Media General chairman J. Stewart Bryan III will continue to serve in that role. Additional board members will include Diana F. Cantor, Royal W. Carson III, H.C. Charles Diao, Dennis J. FitzSimons, Soohyung Kim, Douglas W. McCormick, John R. Muse, Wyndham Robertson and Thomas J. Sullivan. Four of the directors were designated from LIN Media and seven from Media General.

“Today’s votes were an important milestone that brings us one step closer to finalizing the merger,” Bryan said in a statement. “We are pleased by the support of our shareholders, which confirms our confidence in the significant value that this business combination will create for our investors.”

The LIN deal was one of several in the broadcast space over the past several months. Some analysts have speculated that the deal could help spark a second wave of consolidation in the sector, as smaller station groups look to bulk up to compete.

“This announcement is an important step on the critical path to ensuring the company is prepared to hit the ground running once we receive the necessary regulatory approvals,” Sandusky said in a statement. “After the merger is complete, we will have one of the strongest leadership teams in the industry. Their expertise and dedication gives me even more confidence that we will deliver on our promise to build a stronger, more efficient company that will compete effectively in the rapidly evolving media landscape.”